Sigma Partnership says it is becoming increasingly apparent to US, Asia and non-EU based managers and advisers that the EU directive is more protectionist than ever.

The key decision makers in Europe are influencing revisions that favour a “Fortress Europe” stance, such as the deletion of certain restrictions, it says.

As these reports stand, there continues to be much confusion about the Ucits fund regime and the Alternative Investment Fund Managers regime. Sigma says while the former is suitable, despite the different national tax consequences for institutional and retail investors, the funds in the AIFM regime are really for institutional investors only but this important difference is not clearly recognised.

Joe Seet (pictured), senior partner at Sigma Partnership, says: “I am surprised that, so far, only a small number of institutional investors across Europe have expressed concerns about the restrictions on the availability of good non-EU funds managed by non-EU managers the AIFM directive will impose. The directive will be detrimental to pensioners, shareholders and individual beneficiaries.

“Professional and independent due diligence advisors will have little choice but to exclude peer group comparables and benchmarks for funds from non-EU managers from reports to EU based institutional investors and pension funds. Over the long term, this will be to the detriment of all citizens in the EU community. Aside from being protectionist, a ‘one size fits all’ approach is unhelpful and unworkable.”